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In general businesses solve customer problems by providing functional and emotional value.
Functional value
Functional value is defined as the objective utility derived from a products performance. For example, the product provides a more effective and efficient way to accomplish a task, is educational, or improves the quality of life of the person, local community or the environment. Of course, every successful business provides functional value. Some more ambitious and benevolent business initiatives that provide functional value are:
- IKEA augmented reality furniture app: helps customers decide by placing digital furniture prototypes in their room.
- Nike run club community app: where runners can plan their running schedule, track their time and compete with other runners.
Emotional value
Emotional value can be defined as the perceived (subjective) utility derived from a products capacity to arouse feelings or affective states. This value could concern status enhancement, stress reduction, inspiration, care, a sense of belonging or sense of purpose. Nike was one of the first brands that consciously added ’emotional’ value to their value proposition. Their advertisements didn’t talk about the quality of their shoes (i.e. functional value). Instead they focused their messaging on the mindset of athletes that wear Nike (e.g. ‘Just do it’). Other examples are:
- Apple computers ‘Think different’ campaign (1997-2002): hardware for rebels, artistic people and professionals that dare to think different.
- Disney entertainment: a magical nostalgic family experience in the form of amusement parks and merchandise, based on the movies.
- Starbucks coffee: customers enter a welcoming, comfortable and exotic coffee experience in their premium located cafe’s.
- Aman resorts: visitors get an unique boutique hotel experience in a remote, exotic, authentic and aesthetically pleasant surrounding.
- The artist Michael Jackson engaged his listeners in higher consciousness experiences by recording several music videos that touched upon the state of the world and the need to come together.
References
Kato, T. (2021). Functional value vs emotional value: A comparative study of the values that contribute to a preference for a corporate brand. International Journal of Information Management Data Insights, 1(2), 100024.